For Years, Economists Believed That Market Structure Explained the Ability

question 199

Multiple Choice

For years, economists believed that market structure explained the ability of some firms to earn economic profits.Today, economists and business strategists put greater emphasis on

• A)the number of years a firm has been in business and the average price of the products sold by the firm.
• B)the number of countries in which a firm conducts business and the number of employees the firm has in each country.
• C)the characteristics of individual firms and the strategies their managements use to continue to earn economic profits.
• D)the size of a firm relative to the industry average and the number of firms in the domestic industry.

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Definitions:

Stock Traded

Shares of a company that are bought and sold on a stock exchange platform.

Shares

Shares represent the portion of ownership in a company or an investment that entitles the holder to a proportional claim on profits, which may be paid out as dividends if declared.

Unissued Stock

Shares that a company is authorized to issue according to its corporate charter but has not yet issued to shareholders.

Outstanding Bonds

Bonds issued by an entity that are currently not redeemed and are in the hands of investors, indicating debt that still needs to be paid off.